Improving decision-making for small business

Are you sure?

Are you sure this article deserves this vote?

We really appreciate you for flagging misleading or bad content for the community, and we hope you continue to do this. We have to deduct a minimal amount of points to reduce intentional, malicious and fraudulent attacks towards our community members including yourself from reckless multiple down voting activity.

The great Napoleon Bonaparte, who is often considered as one of the greatest military leaders in the history of the western civilisation once said, “Nothing is more difficult, and therefore more precious, than to be able to decide.”

It's true. Leadership and decision-making goes hand in hand. Decision-making can be one of hardest things to do in business, even in our personal lives, but it is an ability we have to master in business to be successful. Indecision or poor decision-making can be severely debilitating. One of my favourite drama series was “24” which stars Kiefer Sutherland as Jack Bauer, focusing on the efforts of the fictional Counter Terrorist Unit (CTU), and their efforts to protect America. Do you remember the drama in which every phone at CTU has the same ring tone? It drove me nuts! Sorry, I digress. Anyway, I love the action-packed scenes, but what was equally intriguing was how indecisions of the US President were not only counter-productive actions but led to paralysis of situations that could otherwise be revived. The plot was exciting with all the twists and turns, but one thing was certain – that is every single moment of indecision or poor decision-making by the leader of the country resulted in a crisis or worsening of it. No exceptions. I wonder what it's like in your business. Has your small business ever suffered from indecisions or ineffective decision-making?

In a recent interesting article by Cara Waters, Chief Editor at SmartCompany, entitled "Top reasons why small businesses fail”, the top 4 reasons why small and medium businesses fail according to a survey of 1000 SME owners were poor financial control, inexperienced management, bad business model and lack of access to capital. The article goes on to describe which of the two top reasons i.e. financial control vs. poor strategic management might in fact be the biggest reason based on prior surveys conducted elsewhere. More to the point, I was flabbergasted when I found out only 26% of the 1000 SMEs surveyed identified failure to seek professional advice as a key reason for failure, while 70% trusted their "gut instinct" over any professional advice.

One of the commentators in the article, Peter Strong, claimed that relying on gut feel over professional advice is the way to go to respond quickly to the market. There is some truth in this but in my experience, good decision-making process has almost never compromise on speed to market. In fact, poor decisions made in haste often lead to wastage and more severe repercussions to already limited funds, resources and in turn, competitive edge.

I remember back in the days when I had the privilege of leading large-scale teams of managers and influencers in the corporate world, critical decisions had to be made non-stop throughout the day, but I would always find time to make at least one phone call to consult or solicit the key information I need before making a key decision. Don’t get me wrong, listening to gut feel is a must-do, but with so much at stake in running a business, relying merely on ‘gut feel’ over professional advice seems dangerously risky, especially when some of such advice can now be readily available. Our goal at SavvySME is to weave in technology with B2B principles to expedite the process of finding practical advice through a simple Q&A, supported by a large community of friendly and helpful professionals with a wealth of local knowledge on broad range of subject areas and local issues that are relevant to small businesses.

Decision-making is a life-long learning, and I'd like to share some tips that has helped me over the years:

1. Get a grip quickly of your business drivers, key decisions to be made and who in your business is accountable for making the decision. Remember it’s important as a leader to delegate and empower others in making decisions to drive accountability and growth in the team.

2. Evaluate your decision-making style including the typical approach you and your team would take to derive at a decision and how it can be improved. Think about how you can maximise the opportunities to collaborate and draw input from individuals in the team.

3. Establish your support network - in other words, a simple laundry list of who can call on for advice. There are various resources on the web. SavvySME is obviously one and a free resource to ask question, knowing that you will have professionals in relevant field to answer your questions. Some questions require expertise in multiple fields so having a single place to ask questions and gather different perspectives is invaluable.

Note however when asking for advice, it’s important to draw a balance and make your own decision with neither over reliance, nor undermining input from others, even experts. No one knows your business better than you do.

4. Pick up a few decision-making frameworks and tools especially for more complex decisions in your business, and evaluate them against how they align with your business objectives and priorities. There are tons of such tools out there (just Google it!). Understanding how to tackle decision problems using simple decision frameworks will prove to be an important arsenal in moving your business forward.

5. Take courage to deal effectively with uncertainty and risk. Don’t ignore them, but at the same time, don’t get overwhelmed to the extent of analysis paralysis like one of the US President in the drama series mentioned above. The best decisions are made with the most input from others and information available at the time decision must be made. It takes just as much courage but once a decision is made, stick to it in the absence of new information.

6. Envision and build a culture of effective decision-making in your business where you acknowledge your team members for making a decision effectively. Be sure to give credit when credit is due, and encourage them to grow through teamwork and accountability. You will end up with a much stronger business simply with leaders that are more capable in your team.

So, in short, never rely on ‘gut feel’ alone. Instead, understand your business drivers, set up simple decision-making tools and processes, and seek input and help from others especially professionals in critical aspects of your business. It is equally important to empower your team to grow in the decision-making process as part of the business. Whatever you do, take courage to make decisions. One of my favourite quote by Jim Rohn (a mentor to Anthony Robbins in the early days) goes like this “It doesn't matter which side of the fence you get off on sometimes. What matters most is getting off. You cannot make progress without making decisions.”

G’day, I am the founder of SavvySME.
Running a business alone is hard, which is why my team and I are keen to do our part to help.
We are proud to create this platform for you to connect, share and engage with service providers who can help grow your business.
Our goal is to become a trusted destination for you to find experts and resources for your business easily.
We invite you to share our vision for a vibrant community of folks looking out for each other :)

Questions

Comments (4)

Some great tips in there. I like to live with balance in mind which is alluded to with your warning. Gut instinct is great without being too arrogant, while minimising risks by listening to advice is sensible without following others blindly. Too bad that unlike the president, we don't have Jack Bauer on hand to save the day :)